STC Number - 266

Price list for inspections

Maintained by: Malaysia
Raised by: Brazil
Supported by: Australia; European Union; New Zealand; Uruguay
First date raised: April 2008 G/SPS/R/49, paras. 26-31
Dates subsequently raised:
Number of times subsequently raised: 0
Relevant documents: Raised orally
Products covered:
Primary subject keyword: Other concerns
Keywords: Control, Inspection and Approval Procedures; Other concerns
Status: Not reported
Solution:
Date reported as resolved:

Extracts from SPS Committee meeting summary reports

In April 2008, Brazil observed that recently approved Malaysian legislation established inspection fees of US$30,000 per year for each Brazilian establishment, even in the absence of any health violations. Although Malaysia had tried to justify the fees as necessary to cover its costs, it was apparent that these fees were not in compliance with the SPS Agreement. According to Annex C, any fees should be equitable compared to those charged to domestic industries, and no higher than the actual costs of the service. Malaysia was clearly overcharging exporting countries, and it was not clear whether any fees were imposed on national producers.
The European Communities shared the concerns raised by Brazil, as it had experienced similar problems. It was clear that the fees were not proportionate to costs, and that the requirement for annual payment of such fees would discourage exporters. Although it appreciated that Malaysia wanted to cover the costs of its own inspectors when they went to other countries, the European Communities requested Malaysia to revise the fee schedule.
Australia also shared the concerns about the trade impact of Malaysia's requirement. It was not clear how this fee schedule had been developed, or why different rates were applied to different trading partners. This could have significant impacts on trade in meats, and Malaysia was requested to explain its current requirements and to consider alternative approaches.
New Zealand also shared the concerns expressed, and furthermore noted that although. Malaysia had bilaterally informed New Zealand of these requirement after the fact, it had not submitted an official WTO notification. New Zealand requested Malaysia to delay implementation of this requirement, to notify it to the SPS Committee, allow time for comments and discussions, and to take these into account.
Uruguay supported the concerns raised by others, and also was concerned that this measure could create an unwelcome precedent if others followed the same example.
Malaysia noted that costs had increased and presented a strain on the national budget. The fees would allow Malaysia to continue inspections without disruption. The measure was not yet in place, and Malaysia was engaging in consultations with exporting countries. The proposed measure had been notified in March 2008, and a comment period was provided.